All language subtitles for 5. Which trading levels to prioritize

This is one of the great puzzles for the
trader who combines structure analysis

with volume profile.

On the one hand, we know the importance
of trading levels, which identify the

extremes of the structures.

These price inflection points generate
the creation of the most important

trading areas in the market, based on
the principle of auction and

between agents, the liquidity zones.

As we already know, these areas are
expected to generate imbalances between

supply and demand that can provide us
with trading opportunities.

On the other hand, as we have just
studied throughout the course, we know

importance of volume in today's markets,
how more and more large traders are

using trading levels to place their
orders, thus creating new areas of

where imbalances are also expected to
occur.

With this in mind, it is logical to ask
which levels are more important, those

of the structure itself, or those of the
volume profile?

The answer, not surprisingly, is both.

Both levels create areas of liquidity.

Both levels create areas of potential
imbalance between buyers and sellers.

In short, both levels create areas that
can provide us with trading

opportunities.

Therefore, it is best to have identified
all these trading levels in order to

make our decision based on them.

Ultimately, the price will confirm which
level is more important in this

particular market condition.

We should not get ahead of ourselves.
Our way of reading the market is

and here lies the importance of the
appearance of our entry trigger as the

trace of the intention of the big
traders in that direction.

To give an example, if we are in the
midst of a potential bullish breakout,

job as analysts is to identify the
operational levels below which the price

likely to fall in order to perform the
confirmation test.

In this case, these will be the
structure's creek.

the former resistance that now becomes
potential support, and the volume

profile's value area high, the trading
level that corresponds to the upper end

of the value area.

Once this is done, we just need to
analyze the market action at these

levels and look for the entry trigger.

The price could reach our first trade
level and not develop the trigger and

instead visit the second trade level
below, which it may or may not do now.

There is no one level that is better or
more important than the other.

At times, and due to market conditions,
the imbalance will be at the structural

level, while at other times the volume
profile will be more important.

It is not a question of guessing, but
simply following the price.

The problem that can be posed now is
what sentiment the market will leave us

with if the price goes for the value
area high instead of the creek.

At that point, the market will have
already crossed the level of the

and visually it could look like we are
facing a false breakout, or upthrust,

rather than an actual breakout.

What do you do then?

First, try to analyze as objectively as
possible the market's previous behavior

and the traces it has left behind.

Evaluate whether it provides the best
possible context based on our trading

checklist, and if so, simply wait for
the price reaction at the value area

If your entry trigger appears, you
should take the trade.

But as is almost always the case, There
are other alternatives.

If you do not have the confidence in the
trade because you have crossed the

creek, wait for a second entry after the
creek has recovered.

In other words, only evaluate the
possibility of entering the market after

have seen the first reaction at the
value area high that pushes the price

out of the range.

From there, you can either wait for a
new trigger to appear or enter the

directly.

Another option is to use active pyramid
management.

If our entry trigger appears above the
value area high, we will enter with a

percentage of the total position there,
and if the price breaks the creek again,

we will value to complete the total size
of the position.

Here, we see a real example where after
the bullish breakout, the market slowly

pulls back to slightly re -enter the
value area, from where a new reversal

is generated that sends the price out of
the range.

After this new bullish reaction, The
price develops a test on the creek of

structure, determined by the high that
established the automatic rally, and

there generates the bullish imbalance
out of the range.

In this example, it does not leave a
clear entry in the test above the value

area high of the profile as it
penetrates inside the value area.

But we know that the last level that
could save the scenario is the VPOC.

Therefore, as long as the price remains
above the VPOC, we should not abandon

the bullish scenario.

As it can certainly be risky to buy in
these range re -entry situations, it is

best to wait for the price to develop
something like what happened here, and

that is that the market reacted to the
upside and positioned above the creek,

giving the signal to go long.

And in this other example, the same
thing happens, but in reverse.

After the bearish breakout, the market
pulls back to the low of the value area,

where it is blocked from moving higher
and generates a new bearish turn.

The market then begins to fall and
returns to the position below the low of

structure that was established by the
selling exhaustion.

It may be that you are not confident
enough to enter on the first test of the

value area low, or that it does not
leave a tradable entry trigger.

The key is that we have a second
opportunity after observing that the

comes back below the low of the
structure, at which point we should wait

price to develop a test of the level, as
it does.

The final reading is that there is no
level better than another.

We must take them all into account
because we do not know which one the

will use to generate the imbalance on
it, if it generates it on any.

Our job is to raise all the
possibilities and let the market